Designing Organizations for Performance Excellence Quality & Performance Excellence, 8th Edition Chapter 7 Designing Organizations for Performance Excellence

Outline Discuss issues related to choosing organizational structures; Describe the functional structure, Show how many aspects of the functional structure stand in the way of quality and how to change it Provide several examples of how firms are making substantial changes in their organizations Compare organizational design from a TQ point of view to more conventional perspectives

Factors Affecting Work Organization Company and organizational guidelines Management style Customer influences Company size Diversity and complexity of product line Stability of the product line Financial stability Availability of personnel

Functional Structure

Problems With the Functional Structure Separates employees from customers Inhibits process improvement Functional organizations often have a separate function for quality No one has control over the entire process

Redesigning Organizations for Performance Excellence Focus on processes Create a team-based organization Make quality everyone’s job Reduce hierarchy Put external customers first Use leadership teams Develop an agile organization Recognize internal customers Redesign work systems

Types of Processes Value-creation processes – those most important to “running the business” Design processes – activities that develop functional product specifications Production/delivery processes – those that create or deliver products Support processes – those most important to an organization’s value creation processes, employees, and daily operations

Process Focus: Gold Star Chili

Make Quality Everyone’s Job Recognize that all jobs involve “managing quality” Eliminate the quality department Example: Texas Nameplate Company

Put External Customers First

Recognize Internal Customers “Chains of customers” concept Process mapping to identify internal customer-supplier relationships Create links between internal customers and external suppliers

Create a Team-Based Organization Structure the quality organization around functional or cross- functional teams

Reduce Hierarchy Eliminate layers of middle management Empower frontline workers Benefits include improved communication Risks include impact on morale and loss of valuable experience

Use Leadership Teams Four elements: leadership, planning, implementation, and review

Develop an Agile Organization Faster reaction to competitive challenges and changing customer demands Simplification of work processes and rapid changeovers

Knowledge and skill sharing Organizational alignment Redesign Work Systems High Performance Culture Job descriptions Employee Involvement Suggestion systems Empowerment Training and Education Teamwork and Cooperation Compensation and recognition Health and safety Flexibility Innovation Knowledge and skill sharing Organizational alignment Customer focus Rapid response

High Performance Culture Five Conditions of Collaboration Respect Aligned values Shared purpose Communication Trust

Work Design Approaches Job enlargement – expand jobs to include several tasks rather than one single, low-level task Job rotation – have individual workers learn several tasks by rotating from one to another Job enrichment – “vertical job loading” in which workers are given more authority, responsibility, and autonomy rather than simply more or different work to do.

Organizational Design for Quality in Action Boeing Airlift and Tanker Programs VA Hospitals Solar Turbines, Inc. Octicon The San Diego Zoo

Comparisons to Organizational Theory Structural Contingency Theory Mechanistic vs. organic Choice depends on organizational environment and technology Institutional Theory Structure legitimizes purpose, even if they may not provide value ISO 9000 and Six Sigma

Outline Discuss issues related to choosing organizational structures; Describe the functional structure, Show how many aspects of the functional structure stand in the way of quality and how to change it Provide several examples of how firms are making substantial changes in their organizations Compare organizational design from a TQ point of view to more conventional perspectives

Homework Questions, pp 318-319 Case Study, p 321 2, 12 Patterson Auto Sales and Service, Revisited